Category: Life Style

The owner of Westfield shopping centres is being bought for $24.7bn (£18.5bn) in a deal which will see the malls launched in new markets.

French property group Unibail-Rodamco is offering $7.55 a share for the Australian business.

Westfield Corporation has 35 shopping centres in the UK and the US while Unibail-Rodamco has 71 sites in Europe.

Unibail-Rodamco said the takeover would result in a “progressive roll-out of the world famous Westfield brand”.

The takeover is the second major deal involving shopping centre owners to emerge in just over a week.

On 6 December, Hammerson, which owns the Bullring in Birmingham, announced a £3.4bn bid for Intu, whose properties include the Arndale shopping centre in Manchester.

In a joint statement, Unibail and Westfield said they would make €100m (£88.2m) in savings a year despite no overlap between where the companies’ shopping centres are based.

Christophe Cuvillier, chief executive of Unibail-Rodamco, said the acquisition of Westfield “adds a number of new attractive retail markets in London and the wealthiest catchment areas in the United States”.

Mr Cuvillier said it will cut the cost of advertising and marketing. At the moment, Unibail shopping centres advertise individually under different brands for big events, such Christmas.

He said that by using the recognisable Westfield brand, which it intends to roll-out across its flagship shopping centres in areas such as Paris, Barcelona, Vienna and Warsaw, it will reduce advertising spend.

It will also save costs at the corporate level because the board of Westfield is stepping down and leaving the combined group.

The group expected to sell €3bn (£2.65bn) worth of assets over the next few years, which will involving divesting of some smaller shopping centres.

Sir Frank Lowy, the billionaire property tycoon who co-founded Westfield in the 1950s, will retire as chairman of Westfield. His sons Peter and Steven will also step down as co-chief executives of the business.

However, following completion of the deal, Peter Lowy will be appointed to the combined group’s supervisory board and Sir Frank will chair a newly created advisory board.

They also said: “The Lowy family is committed to the success of the Group and intends to maintain a substantial investment in the group.”

Sir Frank is one of the richest people in Australia with a fortune of $5.9bn, according to Forbes magazine and was knighted by the Queen last week.

Sir Frank originates from Eastern Europe and survived the Holocaust in Hungary. He moved to Australia in 1952.

Crucial welfare payment will be turned into a loan from 2018, affecting 124,000 individuals who rely on it

Thousands of hard-up older people are being given a stark choice: sign up to a “second mortgage” with the government, or lose some of the financial help you receive.

In a little-noticed move, the government is axing a benefit that has been around since 1948 and has thrown a lifeline to many people on low incomes. “Support for mortgage interest” (SMI) helps financially constrained homeowners with their mortgage payments – some of them might otherwise be at risk of being repossessed. But from April 2018, SMI will no longer be paid as a free benefit. Instead, the government is offering to loan people the money, which will have to be repaid later with interest.

Critics say this means tens of thousands of people, many of them pensioners, will be saddled with what amounts to a new mortgage on top of their existing home loan. A 68-year-old woman who is still paying off her mortgage and receives SMI contacted Guardian Money to say she isn’t comfortable taking out a government loan, so she is going to reject the offer. But that means she will have to find the money to replace the benefit. “This is going to cause a lot of hardship for people,” she says.

However, others argue that it’s not the role of UK taxpayers, many of whom can’t afford to buy a home of their own, to subsidise people’s mortgage payments and enable them to acquire a potentially valuable asset they can pass on to their children after their death.

SMI helps homeowners on certain income-related benefits pay the interest on their mortgage and the Department for Work and Pensions normally sends the money straight to the mortgage lender. It was introduced after the second world war as a working-age benefit that would offer a short-term lifeline to people who had lost their job or become ill and were trying to get back on their feet.

However, almost 70 years later, many of those who receive it are of pension age and retired, and they are able to claim it indefinitely while their mortgage is outstanding. That is because pension credit is one of the qualifying benefits. The others include income support and income-based jobseeker’s allowance.

According to the government, there are about 124,000 people receiving SMI at a cost of £205m a year to the state. Almost half the recipients are of pension age and many have interest-only mortgages.

However, the government said the current setup was unsustainable, so in the summer 2015 budget it announced that from April 2018, SMI would no longer be paid as a benefit. Instead, it will be replaced by a state-backed loan, secured against the mortgaged property. The loans will offer the same support – the DWP will carry on making regular payments to the individual’s mortgage lender – but interest will be added every month to the total amount the person owes. The longer someone has the loan, the more interest they will need to pay back, so those who claim for several years could easily face bills running into thousands of pounds.

This isn’t the same as a normal loan: the mortgage holder does not have to pay it back until the house is eventually sold or transferred to someone else, though they might want to make voluntary repayments if they can afford to. In that sense, it’s like a government-sponsored version of equity release. If someone inherits the house, they will need to pay back the DWP from any available equity if the property is sold or someone else becomes the legal owner. If there isn’t enough equity, any amount that can’t be paid back will be written off.

So will the government make a profit from these loans? The DWP says no, as the interest rate people will pay will be “the rate the government borrows at” and based on official gilt rate forecasts. The latest prediction is for an interest rate of about 1.5% in 2018-19, rising to 2% in 2021-22. If you turn down the offer of the loan, SMI benefit payments will stop on 5 April 2018.

The 68-year-old who contacted us (and didn’t wish to be named) has a £67,000 mortgage. As she has decided she doesn’t want to the loan, she is going to have to find another £55 a month for her mortgage payments, “which is not a lot for some people, but is for others”, she says. “Where are people going to find that kind of money when they are only on a pension in the first place?”

Mutual insurer Royal London has criticised the way the change is being handled. “The government needs to make sure people have the help and advice they need to decide whether or not to take out a second mortgage to pay for this,” it says. “But instead, thousands of people are getting letters that miss crucial details such as the interest rate on the mortgage.”

However, the DWP says switching to loans will save it about £170m a year. It adds: “This change continues to provide a safety net to help people stay in their homes and avoid repossession. Over time, someone’s house is likely to increase in value, so it’s reasonable that anyone who has received financial help towards their mortgage should be asked to pay that back if there is available equity when the property is sold.”

A former Volkswagen executive has been sentenced to seven years in jail and given a $400,000 (£300,000) fine after pleading guilty to helping the German carmaker cheat on diesel emissions tests.

The“dieselgate” scandal has cost Volkswagen as much as $30bn in fines, buybacks and settlements since 2015 when it admitted fitting 11m diesel vehicles worldwide with so-called defeat devices to suppress emissions of nitrogen oxide during tests. These allowed vehicles to cheat pollution tests.

However, Oliver Schmidt, a German national who headed up VW’s environmental and engineering office in Michigan, is only the second person to receive jail time in the US for his role in the scheme.

The first was a company engineer, James Liang, who was handed only a 40-month jail term in August for conspiracy to defraud the US government and violating the clean air act. He is appealing this.

Schmidt had been looking to limit his own sentence to 40 months in jail, with court papers filed last week showing Schmidt had said he only learnt about the scheme in the summer of 2015, at the end of the scandal.

FAQ | Volkswagen emissions scandal

What did VW do?

The company falsified emissions data on its diesel vehicles, pretending they were cleaner than they are

How exactly..?

By installing a piece of software into computers on its cars that recognise when the car is being tested – a so-called “defeat device”. This fine-tunes the engine’s performance to limit nitrogen oxide emissions. When used on the road, the emissions levels shoot back up

How widespread is the problem?

11m cars worldwide had the software installed; 1.2m of them were in the UK

Which models are involved?

The allegations, which have been admitted by VW, cover the Jetta, Beetle, Audi A3 and Golf models from 2009 to 2015 and the Passat in 2014 and 2015. Audi, Seat and Skoda cars are also affected, as well as VW vans. Some diesel and petrol vehicles also have “irregularities” around carbon dioxide emissions.

What happens next?

VW offered to fix affected models and started the recall in January 2016. It is facing investigations in over a dozen countries as well as lawsuits from motorists.

As of March 2017, the company had not reached a compensation agreement with British motorists and the transport minister was considering legal action against VW.

The EU Commission has named the UK among seven countries against which it will take legal action for their inadequate consumer protection regarding this scandal.

However, US federal officials sought the maximum sentence of seven years, saying Schmidt had played a key part in concealing the scheme from regulators given that he held a “leadership role within VW”.

“As a consequence of that role, he was literally in the room for important decisions during the height of the criminal scheme.”

They had also argued that he encouraged “key engineers” at VW to destroy documents relating to the scandal.

While VW has agreed to pay compensation to drivers in the US caught up in the scandal,it has so far refused to pay out to drivers in the UK and in wider Europe, claiming it only broke the law in the US.

However, it was ordered to recall cars in the UK fitted with defeat devices, and in September said it had fixed 775,000 of the 1.15m cars affected.

Cineworld has announced that it is snapping up its US peer Regal for $3.6bn (£2.7bn), turning the British company into the second largest cinema operator in the world, with over 9,500 screens.

In a statement on Tuesday, Cineworld said that the deal would create a globally diversified cinema operator, spanning ten countries and would allow Cineworld to access the North American cinema market – which is the largest box office market in the world.

The US cinema market has had an industry box office worth in excess of $10bn in each year since 2008 and stable admissions in excess of 1.25 billion in each year over the same period, Cineworld said.

“We have long had high respect for Regal and for its strong position in the largest box office market in the world and we are delighted that the Regal directors have unanimously agreed to recommend our offer to their shareholders,” said Mooky Greindinger, chief executive of Cineworld.

“Consolidation is an important move forward and the best practice we have successfully rolled out across Europe will be the key driver to continued success,” he added.

Amy Miles, CEO of Regal, said that she believes the transaction “provides compelling value for our stockholders”.

“We believe this partnership with Cineworld will enhance Regal’s ability to deliver a premium movie-going experience for customers and further build upon our strategy of introducing innovative concepts and premium amenities designed to enhance the value of our theatre assets,” she said.

Cineworld was founded in 1995. It was originally a private company but re-registered as a public company in May 2006 and listed on the London Stock Exchange in May 2007.

On Tuesday it said that it expects the deal to be “strongly accretive to earnings” in the first full year following completion of the transaction, which will be 2019.

The deal will be funded by a rights issue, which will raise approximately £1.7bn, and a debt issue.

Because of the size of the acquisition, Cineworld said that it will be classed as a reverse takeover under the listing rules of the Financial Conduct Authority. As such it will be conditional on the approval of Cineworld’s shareholders at a general meeting which is expected to take place in February next year.

Cineworld added, however, that board intends to unanimously recommend the deal. The directors of Cineworld also intend to vote in favour of it, the group added.

Separately, Cineworld said that the Anschutz Corporation, which controls about 67 per cent of the voting rights in Regal, has agreed to provide its written consent to approve the takeover.

Shares in Ocado surged by more than 20 per cent in early trading on Tuesday after the online supermarket announced that it had struck a deal to cooperate with French retailer Groupe Casino.

Ocado said that it had sealed a deal with Casino for the latter to use its e-commerce platform to help bolster its online business.

As part of the deal, Casino will build a fulfilment centre using Ocado’s mechanical handling equipment. The plant will serve the greater Paris area, the Normandie and Hauts de France Regions.

The construction and launch is expected to take at least two years.

Ocado will take care of maintenance and provision of technology within the centre. In return, Casino will pay Ocado upfront fees after signing the deal, and during the development phase. It will then pay ongoing fees linked to the use of the fulfilment centre.

“This agreement is a major leap in terms of quality,” said Jean-Charles Naouri, chief executive of Groupe Casino.

He said that the agreement would strengthen the quality of service available to its customers.

Tim Steiner, CEO of Ocado, said that he was “delighted” with the deal.

“We continue to make investments to commercialise our proprietary platform and expect this deal to be one of many successful collaborations with leading retailers to use it the world over.”

Ocado also said that it expects the deal to “create significant long term value to the business”.

Analysts have for some time said that international collaboration is crucial to Ocado’s ongoing success and on Tuesday ETX Capital senior market analyst Neil Wilson said that investors “should be relatively hopeful that this is just the start of a number of new deals around Europe”.

He also cautioned however, that shareholders should watch “just how much the technology investment eats up earnings and whether these deals increase the cash burn.”

“They also appreciate the craftsmanship. Not a lot of things are built by hand these days.”

The company was born in 2012, after the 48-year-old American decided to combine his long held passions for woodwork and cycling.

All his bikes all have wooden frames; the other parts, such as the gears and wheels, are made from steel, carbon or rubber.

Prices range from $3,500 (£2,600) to $11,000.

Sales have gradually been increasing, but it hasn’t been easy, says Mr Connor. That’s because of a perception among some cyclists that wooden bikes may break or be unsafe.

In fact, Mr Connor says wood is very durable, which is why it’s used to make tool handles, skis, boats, even light aircraft.

It also absorbs vibrations well, making cycling on bumpy roads smoother, less tiring and quieter.

“And of course, these bikes look great,” says Mr Connor, who makes his frames made from “strong but flexible” white ash or “eye candy” black walnut.

A recently published book called “The Wooden Bicycle: Around the World” features 111 companies that make bikes from wood or bamboo.

Only one, Splinterbike in the UK, sells 100% wooden models with its bikes featuring wooden gears, chains and wheels.

However, most limit their use of wood to the frame, and occasionally parts such as the handlebars and forks. Other parts will be made from materials typically associated with bikes, such as aluminium.

It is the unique design of wooden bikes, and their bespoke craftsmanship, that underpins their appeal, says Gregor Cuzak.

The Slovenian co-founded Woodster Bikes after meeting woodworker Iztok Mohoric, who had recently designed a bike with a wooden frame.

“I wasn’t interested at first, but after I saw it and took a ride, I was immediately convinced,” Mr Cuzak says. “People were watching me as if I was driving a wild sports car.”

Like other firms in the space, Woodster is targeting customers who appreciate the finer things in life. Its bike frames are made of woods such as beech and bog oak, and prices range from 2,500 euros (£2,190) up to 17,000 euros.

In addition, every customer gets a book with a story about how their individual bike was made.

“We even plant a new tree at the same location where we cut one for your bike,” Mr Cuzak adds.

It’s a shopping event that didn’t even exist here a few years ago but now seems to have turned into a relentless machine.

Look around you today, and witness an outbreak of furtive shopping.

People at work, on the train or maybe sitting opposite you in the living room, all looking at a screen, spending time on spending money.

Today is Black Friday, a retail event that didn’t even exist in this country a few years ago but now seems to have turned into a relentless machine.

In shops and online, we are expected to spend around £3bn over the next few days. Black Friday, after all, doesn’t actually stop until Sunday or Monday.

Yes, it’s a bit gaudy and no, not every retailer joins in.

Marks and Spencer, for instance, have made a point of avoiding this carnival of cost-cutting, but every year, more people do seem to get involved.

Today, you’ll see special deals at stores ranging from Poundland to John Lewis, which rather suggests that Black Friday is here to stay.

But why? Why would retailers decide to embrace all this, offering huge discounts in the run-up to Christmas, traditionally the time when we all dig into our savings for an annual shopping splurge?

Why, to use a rather vivid metaphor, would shops cannibalise their own sales?

To discover the answer, you have to cast your mind back to the financial crisis and then gently scroll forward.

In the years that followed, Britain’s economy was helped by consumer spending.

British shoppers, to put it bluntly, kept on opening their wallets, and Britain’s retailers kept finding things to sell to them.

The competitive nature of that was fierce – just look at food price deflation or the collapse of BHS as evidence of that – but our best retailers are all still there.

Into that pot came tumbling the explosive expansion of online shopping.

The internet delivered three strands: traditional retailers who found a new way of selling goods, pure online companies such as ASOS or Ocado, and then Amazon – a company worth £418bn at last count, but which is younger than Ariana Grande, and sells just about everything, to just about everyone.

British retailers found themselves battling to understand how to combat Amazon, and also how to keep us all spending money.

And then, Black Friday tumbled into their laps, offering an opportunity.

Black Friday was already an American institution, heralding a shopping splurge after Thanksgiving, and it was brought here by Walmart, an American company.

But the Brits have embraced it – retail giants such as Dixons Carphone commission special Black Friday products a year in advance while the list of special deals is long and detailed.

Yes, some of them are things they’re trying to get rid of anyway, and yes, some of them were probably available at a discount price a few months back anyway.

But few now doubt that there are bargains to be had out there.

This is an important Christmas period. Retail sales have been weak over the past few six months and plenty of retailers I speak to paint a picture that is tougher even than official statistics suggest.

Some say their focus is pretty much entirely on survival, rather than growth and they worry that the likes of Amazon are selling products for below-cost, creating prices that are impossible to beat on a regular basis.

Black Friday gives them a chance to grab back our attention.

And curiously, it seems that this doesn’t ruin Christmas sales – only one in five Black Friday sales are Christmas presents.

Mostly, it’s people treating themselves to a bargain purchase, and mostly they’re doing it online.

Only 20% of Black Friday shopping is done in an actual shop.

That’s why you’re going to see so many people studying screens over the next couple of days, adding to the billions that we spend over a weekend.

That leaves other, pressing questions – if more shopping is now being done online, and if young people assume all transactions are done online by default, what are the consequences for physical shops, for delivery companies, automation and retail employment?

These could end up being crucial questions for the UK economy – something to ponder as you wait at the online checkout.

Revenues at APC, which has 112 sites around the UK, crept up 0.8pc to £103m in the year to March 31 as the company moved away from so-called “heavy traffic” like white goods and carpets towards smaller parcels and packets, shipments of which have increased as online shopping has boomed.

Chief executive Jonathan Smith told The Daily Telegraph the company had seen particularly strong growth in the food and drink market.

Mr Smith said: “We’ve seen a real growth in niche beers from micro breweries. There’s more breweries in the UK than any time in the last 50 years, and lots of them have got online businesses now, which we serve.”

The number of UK breweries has soared 64pc to almost 2,000 since 2012, according to figures released by accountants UHY Hacker Young, as punters have ditched mass-produced lagers in favour of more unusual tipples.

Founded in 1994, APC is owned by 33 of its network members, local delivery companies for which it provides transportation and sorting services.

Larger logistics firms are gearing up to cope with the annual online shopping rush on Black Friday later this week, but Mr Smith said APC, which caters mostly to SMEs, does not anticipate such a large surge.

“There is a peak definitely, but lots of SMEs say do you know what, we’ve got a great service, a great product, we don’t take part in that,” Mr Smith said.

Delivery companies face an increasing struggle to cater to customers in large cities, and particularly in London, he added, as industrial space previously occupied by warehouses is converted into homes.

Bloomberg Pursuits’ James Tarmy went inside the secure underground vault at Christie’s, to check out some very expensive paintings before they are showcased and auctioned. At the November 15th auction, a late period Da Vinci painting sold for over $450 million, setting a new record for an art sale.

In the 1980’s he was homeless while he tried to raise his toddler son.
To get off the streets he became a stockbroker and later, an entrepreneur.
Today he’s worth millions and had Will Smith play him in a movie.
He’s Chris Gardner and here are his Top 10 Rules for Success.

More than a million credit card users who are struggling financially have had their credit limits increased without asking, a charity has said.

Such borrowing could make their financial problems worse, so Citizens Advice is calling for a ban on unsolicited increases in credit card limits.

It wants Chancellor Philip Hammond to include such a move in the Budget.

But providers say protection is being improved.

Citizens Advice said its research, based on a sample of 1,300 people with credit cards, suggested as many as six million cardholders may have had their credit limits put up without their consent in the last year. Some 1.4 million of those would be struggling financially.

Providers have agreed to a voluntary code being developed by the Financial Conduct Authority (FCA), the City regulator, which would see restrictions and choice on credit limits.

They will start asking new customers for their consent before raising limits, and give them the option to carry on receiving uninvited increases. Existing customers will be given the option to ask their lender to require their consent.

But Citizens Advice is calling for the chancellor to impose a clear ban on increases which customers have not even requested.

Gillian Guy, chief executive of Citizens Advice, said: “Rather than credit card holders seeking to take on more debts, lenders are actively pushing it on people without enough consideration as to who can afford to pay and who can’t.

“Few consumers support unsolicited increases and our research shows that they make people’s debt problems worse. The chancellor must step in.”

Richard Koch, head of cards at UK Finance, which represents card companies, said providers were “thoroughly committed” to the new agreement.

“All our members undertake a thorough risk and affordability assessment of a customer’s finances whenever they apply for credit. This degree of rigour continues throughout the relationship, with ongoing monitoring of how the customer uses the credit product,” he added.

Sales of the dessert are up by 30% in six months after Premier Foods launches ready-to-eat version

Angel Delight is making a comeback half a century after the whipped dessert first hit the shelves.

Sales of the brand jumped 30% over the six months to the end of September, according to its maker, Premier Foods, as consumers were tempted back by a new ready-to-eat version of the milky dessert, first launched in 1967 by Birds.

“Angel Delight, one of the group’s smaller and historically less heavily invested brands, grew by 30% in the period, benefiting from the launch of convenient ready-to-eat pots,” the company said

In its traditional form, which is still available, consumers whisk milk into the Angel Delight powder, which comes in strawberry, chocolate, banana and butterscotch flavours.

The resurgence of Angel Delight reflected a broader trend in Premier’s first-half results, as consumers opted for products that were designed to be eaten “on the go”.

“Batchelors is now the fastest-growing major brand in our portfolio following the launch this year of convenient pot format products such as Super Noodle pots,” said the Premier Foods chief executive, Gavin Darby.

Premier Foods’ sales rose 1.5% over the six months to £353.3m, while pre-tax losses narrowed to £1.2m from £8.7m over the same period a year earlier.

Darby said a strong performance in the second quarter, with sales up 6.2%, helped to offset a “challenging” first quarter. He said expectations for the full year were unchanged.

Darby said Premier’s strategic partnerships with Japanese instant noodle company Nissin and Cadbury owner Mondelez International were paying off, together delivering more than 40% of revenue growth in the second quarter.

Shares rose 4.8% after the results were announced.

• Follow Guardian Business on Twitter at @BusinessDesk, or sign up to the daily Business Today email here.